Closing summary
Former Lib Dem leader Sir Vince Cable gave testimony at the public inquiry into the Horizon IT scandal calling managers at the Post Office “thugs in suits”, claiming he would have got to the bottom of the miscarriage of justice if he stayed in government.
Cable, who was business secretary from 2010 to 2015, told the inquiry that he only began to “smell a rat” just before parliament was dissolved ahead of the general election.
However, he failed to act on a campaign being mounted by a growing number of MPs, and only learned who lead campaigner Sir Alan Bates was in March 2015, blaming them for not coming to see him in person.
Cable said that issues relating to the Horizon IT system were barely raised with him in the five years he was in post, and admitted that in hindsight he should have been given a detailed briefing because of the “risk factor” surrounding the technology that was not being revealed by the Post Office or civil servants.
Elsewhere, ITV reported a 17% boost in advertising in the second quarter thanks to the Euro 2024 tournament and a boost in viewing of Love Island, while the broadcaster also acquired the maker of hit TV shows including “Sherlock”.
And Universal Music, home to artists including Taylor Swift, suffered a share price lunge of more than a quarte after the world’s biggest music company reported lower than expected streaming numbers.
Our other main stories today:
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Key event
Greg Clark, the business secretary from 2016 to 2019, has begun to give his testimony at the public inquiry into the Post Office Horizon IT scandal.
Clark was in place as the Post Office started to come under signifcant pressure as Sir Alan Bates and 554 other subpostmasters began – and won -- a high court action against the organisation.
The Horizon scandal resulted in more than 700 post office operators being prosecuted between 1999 and 2015 for theft, fraud and false accounting because of faulty accounting software installed in the late 1990s.
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Key event
Cable said that he began to “smell a rat” at the end of his time in office and said if he had returned to the post after the 2015 general election he would have investigated the Horizon IT scandal.
Given time I probably would have done, and should have done, [something],” he said. “We were a day or so before the end of parliament I was beginning to smell a rat. Had parliament continued, or had I returned to office, I’d have got all these people around the table.”
Cable said that he would have gathered together the House of Commons business select committee, which by this time had raised the Horizon issue with him, campaigning MP James Arbuthnot and Post Office executives.
And for the first time Mr Bates, I’d not heard of him until this point,” said Cable. “I’d have had them round a table and said ‘what the hell is going on here?’. But I didn’t have the time to do that.”
Universal Music shares fall 25% as streaming growth disappoints
Almost £12bn has been wiped off the market value of Universal Music, home to stars from Taylor Swift to The Beatles, after the world’s biggest music company reported lower than expected streaming numbers.
Amsterdam-listed Universal Music, which reported results after market close on Wednesday, reported strong growth across its overall business with revenues rising 8.7% to €2.9bn year-on-year in the second quarter.
However, analysts were disappointed at lower than expected growth in streaming, which has underpinned a revival in the fortunes of record companies over the last decade.
Subscription revenue grew by 6.5% in the second quarter, driven by growth in global subscribers and price increases, while streaming revenues fell by 4.2%.
Barclays, in an analyst note titled “Handbrake”, said that investors would focus on the “significant miss” in overall paid streaming - 7% in the second quarter versus a consensus expecting 11% growth.
On Thursday, shares in Universal tumbled by more than a quarter, stripping the company of €13.5bn in market value.
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Key event
Cable has said that not one of a group of 140 MPs campaigning on behalf of subpostmasters came to talk to him about the issues with Horizon, adding that “writing polite letters” is not the way to get things done.
In 2015, James Arbuthnot, who tirelessly campaigned on behalf of the subpostmasters, criticised Cable for listening to the Post Office but not the large group of MPs and the subpostmasters affected by the Horizon IT scandal.
What is strange about this whole episode is that none of these 140 MPs ever came to talk to me,” said Cable. “All MPs realise that writing polite letters is not necessarily the way to get through to people in government. You have to talk to them face to face.
Jason Beer, counsel for the inquiry, asked whether he was blaming the campaigning MPs for not making more effort to see him in person.
I am not blaming them,” said Cable, who said he only began to “smell a rat” in March 2015 just before Parliament was dissolved. “It is not a question of blame. Let’s just say it was unfortunate that I never had any personal contact with the MPs about this matter. They had abundant opportunities to do so. They took a different route. I’m not remotely critical, particularly [not of] Lord Arbuthnot, he did a heroic job. I wouldn’t dare to criticise him.
Beer asked whether it really would have been any different if they had, given government officials and the Post Office had managed to maintain a line that there was no issue with Horizon across his time in post.
Probably, there would have been [a different outcome],” he said. “ I would have realised much earlier than March 2015 that serious problems were not being properly addressed by the Post Office and the Department and would have started to interrogate it much more aggressively as I did on quite a lot of other issues when MPs came to see me.
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Former business secretary Vince Cable agrees that Post Office management were 'thugs in suits'
In testimony to the public inquiry into the Horizon IT scandal, the former Lib Dem leader Vince Cable concurreed with a description of Post Office management as “thugs in suits”. He said that during his time as business secretary he had a goal of rebalancing the relationship between bosses and post office operators.
He recounted a story about challenging eight Post Office closures in his constituency, before he entered government, and being treated poorly by the organisation’s “middle management”.
Mr Bates has, I believe, described them as ‘thugs in suits’ and I recognise the description,” said Cable in his witness statement. “And [the Post Office] dealt with us in an arrogant way when we campaigned against closures.
When Cable became business minister he set as one of three goals addressing this power imbalance through the idea of mutualisation.
In my first meeting with Paula Vennells [Post Office chief executive] I suggested this is what the Post Office should do,” he said. “We perhaps should have been more modest and had postmasters on the board, which would have achieved some of our aims, which I think has now happened.
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Vince Cable has said issues relating to the Horizon IT system were barely raised with him in the five years he was in post as business secretary, and that he never knew who justice campaigner Sir Alan Bates was.
The former Lib Dem leader, who was business secretary for an unusually long period between 2010-15, said the Horizon IT system was rarely ever raised with him.
Problems with Horizon barely came across my desk,” he said. “When they did it was usually in a very uncontroversial way and not drawn to my attention as an issue I should focus on. General reason is that the officials who were briefing me and ministers on the subject hadn’t seen it as a particular problem.
Cable admitted that he should have been more thoroughly briefed on the Horizon system at the time.
In hindsight, I should have been told at the outset what Horizon was,” he said. “That competent people … were suggesting there was a risk factor and I should have been told about Mr Bates and the justice group. I never heard his name until I’d been in the job five years. I wasn’t briefed on them.
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Former Lib Dem leader Vince Cable testifies at inquiry into Post Office Horizon scandal
Former Liberal Democrat leader Vince Cable has begun testifying at the public inquiry into the Post Office Horizon IT scandal.
Cable, who is due to give testimony this morning, was business secretary from 2010 to 2015 when the government privatised the Post Office.
He was in post when the Post Office received the report by forensic accountants Second Sight, which raised serious concerns about Horizon, which executives used selectively to push the long-held party line that there were no problems with the system.
Greg Clark, the business secretary from 2016 to 2019, is set to appear at the inquiry this afternoon.
Clark was in place as the Post Office started to come under signifcant pressure as Sir Alan Bates and 554 other subpostmasters began – and won -- a high court action against the organisation.
The Horizon scandal resulted in more than 700 post office operators being prosecuted between 1999 and 2015 for theft, fraud and false accounting because of faulty accounting software installed in the late 1990s.
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Anglo American takes $1.6bn writedown of Yorkshire fertiliser mine
Anglo American has taken a further $1.6bn writedown on its UK fertiliser mine, as the FTSE 100 miner announced a $672m loss in the first six months.
The company, which is looking to cut costs and boost returns after fighting off a £39bn takeover attempt from rival BHP, took a $1.6bn impairment charge on the Woodsmith mine in North Yorkshire last year.
Anglo American, which reported a 3% drop in underlying profits of $4.9bn, has slowed the development of the mine which it had aimed to get into production by 2027.
Our decision to temporarily slowdown the Woodsmith crop nutrients project and thereby push out its production timing has resulted in a $1.6bn impairment of the project,” said Duncan Wanblad, the chief executive. “As we progress our portfolio transformation, we expect to substantially reduce our overhead and other non-operational costs in phases, but weighted towards the end of the process to minimise business risk.
In May, Wanblad announced a plan to reshape the company to refocus on copper and iron ore, including selling off the famous diamond business De Beers.
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ITV ad revenues surge 17% thanks to Euro 2024 tournament
ITV has reported a 17% surge in ad revenue in the second quarter fuelled by the Euro 2024 tournament, as the broadcaster announced it has taken a majority stake in the TV producer behind shows including Sherlock, The Devil’s Hour and Douglas is Cancelled.
The broadcaster, which said that overall first half ad revenues increased by 10%, beat its forecasts of a 12% rise in the second quarter and 8% over the first six months.
However production arm ITV Studios reported a 13% fall in revenues for the first half, impacted by the writers’ and actors’ strike in the US and the timing of the deliveries of shows to broadcasters.
The broadcaster also announced that its production arm has taken a majority stake in Hartswood Films, the production company behind the Emmy-winning series “Sherlock”, for an undisclosed sum.
Founded in 1979, Hartswood, which is based in London and Cardiff, is the UK’s longest-established scripted TV producer.
Overall, ITV reported adjusted profit before tax up 51% year-on-year to £178m in the first half, and a 3% dip in total revenues to £1.9bn.
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Markets in US and Asia fall on AI jitters; Revolut finally wins UK banking licence
Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.
Markets in the US and Asia fell sharply as investors sold off shares in tech companies, with artificial intelligence (AI) stocks taking the biggest hit.
In New York the Nasdaq, favoured by tech companies, fell 3.6% and the S&P 500 lost 2.3% on Wednesday making for the biggest one day falls since 2002.
The losses were driven by firms including Nvidia (-7%), Google-owner Alphabet (-5%), Microsoft (-3.5%), Apple (-3%) and Tesla (-12%).
On Thursday, Japan’s Nikkei index fell 3%, as markets in Asia also suffered declines.
In the UK, Revolut has finally secured a banking licence, albeit with “restrictions”, more than three years after Britain’s most valuable fintech firm lodged its application with regulators.
Revolut waited years for approval, having first lodged its application for a UK banking licence in 2021. The challenge, in part, had been convincing regulators that Revolut has addressed a number of accounting and reputational concerns in recent years, after EU regulatory breaches, questions over its corporate culture and the late filing of its accounts.
A UK banking licence is a key step in accelerating Revolut’s growth, as it moves the company on from its current status as an e-money firm that operates as intermediary between consumers and licensed banks.
A UK licence will allow it to hold and customer deposits, opening the door to new income streams, since it can start funding its own-branded loans and mortgages.
In other news, British Gas has reported an operating profit of £159m in the first half, down from the record £1bn reported in the same months last year.
Profit levels are now “normalising” after the energy crisis which saw the watchdog, Ofgem, allow British Gas to claw back more money from household bills to recoup the costs of supplying its 10m customers.
Ofgem’s decision handed British Gas a £500m boost but following the one-off windfall the supplier’s profits have fallen back in line with more typical earnings.
The Agenda
Car production statistics for June, year-on year comparison
From 945am BST: Post Office Horizon inquiry – Former Liberal Democrat leader Vince Cable followed by former business minister Greg Clark
130pm BST: US GDP
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